8(a) Qualification Exam

To help small, disadvantaged businesses compete in the marketplace, the SBA created the 8(a) Business Development Program.*

True

False

To qualify for the 8(a) Program, a socially and economically disadvantaged individual must own what percent of a business?*

25%

50%

51%

100%

Once enrolled in the program, how long does it last?*

Two Years

Four Years

Five Years

Nine Years

The Developmental Stage of the program lasts for one year.*

True

False

The Transition Stage of the program lasts for five years.*

True

False

Program participants can receive sole-source contracts for goods and services of up to how much?*

$1 million

$250,000

$4 million

No limit

Program participants can receive sole-source contracts for manufacturing of up to how much?*

$1 million

$6.5 million

$250,000

No limit

8(a) firms can form joint ventures and teams to bid on contracts.*

True

False

Program goals require 8(a) firms to:*

Maintain a balance between their commercial and government business

Limit on the total dollar value of sole-source contracts that an individual participant can receive while in the program: $100 million or five times the value of its primary NAICS Code

A and B

Neither A nor B

The SBA district offices monitor and measure participant progress through*

Annual Reviews

Business Planning

Systematic Evaluations

A and B

A and C

A, B, and C

Only American citizens, by birth or naturalization, can qualify for the 8(a) Program.*

True

False

Owners of large and small businesses are eligible for the 8(a) Program?*

True

False

The business must demonstrate a potential for success.*

True

False

Separate eligibility requirements exist for a business owned by American Indians, Native Alaskans, Native Hawaiians, or Certified Development Companies.*

True

False

Disadvantaged individuals must show that he or she is socially disadvantaged to qualify for the 8(a) Program.*

True

False

Under federal law, socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identification as members of groups without regard to their individual qualities.*

True

False

Which of the following groups are presumed socially disadvantaged by the SBA?*

Black Americans

Hispanic Americans

Native Americans

Asian Pacific Americans

Subcontinent Asian American

All of the above

None of the above

If you do not belong to one of the groups the SBA deems socially disadvantaged, you cannot be admitted to the 8(a) Program.*

True

False

Which of the following must an individual who is not a member of a socially disadvantaged group submit in order to qualify for the 8(a) Program?*

At least one objective distinguishing feature such as race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar causes not common to individuals who are not socially disadvantaged

Personal experiences of substantial and chronic social disadvantage in American society, not in other countries

Negative impact on the individual’s entrance into the business world or advancement in the business world because of the stated disadvantage(s)

All of the above

None of the above

The SBA requires 8(a) Program participants be of good character.*

True

False

Who must meet 8(a) Program character requirements?*

Owners(s) of more that 10%

Officers

Directors

Members

Partners

Key Employees

A, B, and D only

B, C, and E only

All of the above

None of the above

The FBI conducts a background check before a business is enrolled in the 8(a) Program.*

True

False

To be admitted into the 8(a) Program, you must meet economic criteria.*

True

False

Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities.*

True

False

To prove he or she meets the economic conditions for enrollment in the 8(a) Program, a person must provide information about his or her income (from the last years), fair market value of all assets, personal net worth (assets and liabilities), transfer of assets to an immediate family member (directly or via trust), information about available retirement accounts, and :*

Income received from the firm when filing taxes as an S corporation or partnership

Reinvestments into the applicant firm

Tax payments for the first

All of the above

None of the above

To be eligible for the 8(a) Program, a person’s assets cannot exceed $1 million.*

True

False

To be eligible for the 8(a) Program, a person’s personal income cannot exceed $250,000 averaged over three years.*

True

False

To be eligible for the 8(a) Program, a person’s adjusted net worth must be less than $150,000.*

True

False

To be approved and remain in the 8(a) Program, a firm must show that one or more socially and economically disadvantaged individuals:*

Owns at least 51 percent of more of the firm.

Possesses direct ownership, meaning the firm is neither owned through another firm nor trust (with the exception of certain living trusts).

Has unconditional ownership, without restrictions or conditions.

Is entitled to receive distributions commensurate with ownership percentages – both annually and when stock is sold or firm is dissolved.

The SBA regulations also have specific restrictions on ownership by immediate family members, non-disadvantaged individuals, and by other firms.

All of the above

A. B, and D only

To determine whether a firm is unconditionally and directly owned by a disadvantaged individual, the person must provide Articles, bylaws, operating agreements and partnership agreements; Stock certificates, stock options, outstanding shares, unexercised and exercised stock options, and types and class of voting stock in a corporation; Types and classes of member interest in a limited liability company (LLC); Types and classes of partners in a partnership; Prior owners of the firm and future proposed changes; and:*

Ownership in other businesses by the disadvantaged individuals, by non-disadvantaged owners, and immediate family members of both

Ownership of the firm by other businesses or a trust

Ownership changes (to or from immediate family members, a spouse, another firm, other individuals, etc.)

None of the above

All of the above

To determine that a disadvantaged majority owner controls a business, the SBA looks at multiple factors from several different supporting documents.*

True

False

If control changes after a business is admitted into the 8(a) Program, it can remain, even if no longer controlled by a disadvantaged person?*

True

False

Businesses who are enrolled in the 8(a) Program are eligible to reapply at the end of their time in the Program?*

True

False

The SBA allows franchises to enroll in the 8(a) Program.*

True

False

Brokers and nonprofit organizations are eligible for the 8(a) Program?*

True

False

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